8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 5, 2005

GRAYMARK PRODUCTIONS, INC.

(Exact Name of Registrant as Specified in Charter)

Oklahoma	000-50638	20-0180812
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

101 North Robinson, Suite 920

Oklahoma City, Oklahoma 73102

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (405) 601-5300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement.

Senior Promissory Note.  On August 5, 2005, GrayMark Productions, Inc. and its subsidiaries (the “Company”) issued a promissory note (the “Note”) in the principal amount of $750,000 to one of its non-affiliate shareholders (the “Note Holder”) evidencing a $750,000 loan. The outstanding principal amount of the Note is secured by all assets of the Company including all purchase agreements and any options or rights to acquire, all intellectual and real property, all assets and properties of the Company and all of its existing and future subsidiaries. The Note bears interest at the rate of 8% per annum.

The Note will become due and payable on the first to occur of: (i) July 27, 2007 (the “Maturity Date”); (ii) the consummation of a Qualified Financing; or (iii) the continuation of an Event of Default for more than 30 days following notice of the occurrence of the Event of Default.  Upon consummation of a Qualified Financing, the outstanding principal amount of the Note and all accrued and unpaid interest (collectively the “Note Balance” at any applicable time) will automatically convert into shares of equity securities of the Company equal to 120% of the Note Balance, divided by the price per share of the equity securities sold in the Qualified Financing.  The maximum price or value of the equity securities into which the Note Balance converts may  not exceed the equivalent of $1.10 per common stock share of GrayMark Productions, Inc.

“Qualified Financing” refers to any equity financing pursuant to which the Company receives aggregate gross cash proceeds of $2,000,000 or more (excluding the automatic conversion of the Note) on or before the Maturity Date.  An “Event of Default” is defined as follows:

•the failure to make a timely principal or interest payment for a period of three business days after the payment due date; or

•the making of a materially false or incorrect, or the material breach of any representation, warranty or certification contained in the Note or in any certificate or financial statement on the date made; or

•the holders of any indebtedness (“Indebtedness”) of the Company or any of its subsidiaries in the aggregate principal amount of $500,000 or more accelerate prior to the stated maturity or payment date and the Indebtedness is not discharged in full or the acceleration is not stayed, rescinded or annulled within 10 business days of the acceleration; or

•the entry of judgments and orders against the Company or any of its subsidiaries that remain unstayed for more than 60 consecutive day and for the payment of money in excess of $500,000 in the aggregate (net of any insurance coverage) that are not discharged; or

•(i) the application for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or assets, (ii) the written admission of the inability to pay its debts as they become due, (iii) the making a general assignment for the benefit of its creditors, (iv) the commence a voluntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), (v) the filing of a petition seeking advantages of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally, (vi) the written acquiesce to an involuntary petition filed under the Bankruptcy Code or comparable laws of any jurisdiction, or (vii) the taking of any action under the laws of any jurisdiction (foreign or domestic) analogous to the foregoing; or

•the commencement of legal proceeding without the Company’s application or consent seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and the legal proceeding shall continue undismissed, or unstayed and in effect, for a period of 30 consecutive days or any order for relief shall be entered in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction ; or

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•the material impairment of the Company’s ability to perform its financial obligations, or a material impairment of the enforceability or priority of the Note Holder’s creditor priority as a result of an action or failure to act by the Company.

All or any portion the Note Balance may be prepaid upon five business days prior written notice to the Note Holder (the “Company Prepayment Notice”) at a cash price equal to 110% of the Note Balance (the “Company Prepayment Price”).  The date of the prepayment (the “Company Prepayment Date”) shall be no more than five trading days after the date on which the Note Holder is notified of intent to prepay the Note (the “Company Prepayment Notice Date”).  If the Company fails to make the prepayment by the 6th trading day following the Company Prepayment Notice Date, the prepayment will be declared null and void and the Company will not have  right to deliver a Company Prepayment Notice to the Note Holder in the future (i.e., the right to make a prepay).

Upon the occurrence of a Major Transaction, the Note Holder will have the right and option to require prepay of the Note Balance at a price equal to 110% of the outstanding principal amount (the “Prepayment Price”). The Company is required to pay the Prepayment Price to the Note Holder at or prior to the closing of the Major Transaction against receipt of the Note.

If the Company fails to prepay all of the Prepayment Price (other than pursuant to a dispute related to calculation of the Prepayment Price), the unpaid portion of the Prepayment Price will bear interest at the rate of 2.0% per 30 consecutive days until paid in full.  Until full payment of the unpaid Prepayment Price, the Note Holder will have the option to, in lieu of prepayment, require the Company to promptly return to the Note Holder the Note (as  submitted for prepayment by the Note Holder)

A “Major Transaction” is defined as the consummation of any of the following transactions:

•the consolidation, merger or other business combination of the Company with or into a person or entity, other than (A) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company, or (B) a consolidation, merger or other business combination in which holders of the Company’s or any of its subsidiaries voting power immediately prior to the transaction continue after the transaction to hold, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities);

•the sale or transfer of all or substantially all of the Company’s or any of its subsidiaries’ assets; or

•the consummation of a purchase, tender or exchange offer made to the holders of more than 30% of the outstanding the Company’s common stock shares;

provided, however, the following are considered a Major Transaction:

•the Qualified Financing;

•a split, reverse split, dividend or distribution with respect to the common stock of the Company which has been disclosed to the Note Holder;

•the tender, exchange or repricing of any securities of the Company that are convertible into common stock shares of the Company which has been disclosed to the Note Holder.

Common Stock Purchase Warrant Agreements.  In conjunction with issuance of the Note, GrayMark Productions, Inc. and the Note Holder entered into two Common Stock Purchase Warrant Agreements, each evidencing warrants exercisable on or before August 5, 2010, one agreement providing for the purchase of 250,000

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common stock shares at $2.00 each and the other agreement providing for the 250,000 common stock shares at $3.00 each (the “Warrants”).  The number of common stock  shares purchasable will be appropriately adjusted in the event of any merger, consolidation, recapitalization, reclassification, stock dividend, stock split or similar transaction.  The Warrants may be exercised by paying $2.00 or $3.00 purchase price. 

For the period ending May 31, 2011, GrayMark Productions, Inc. agreed to include the common stock shares underlying the Warrants in any registration statement it files with the United States Securities and Exchange Commission at the  expense of the Company.

Viewtrade Financial served as the Company’s financial advisor and was paid a fee $75,000.

The Note and Warrants described above were issued in a single private transaction with an “accredited investor” within the meaning of and as defined in Rule 501(a) , in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As stated above in Item 1.01, the Company secured debt financing in the original aggregate principal  amount of $750,000. The details of the debt obligation as described in Item 1.01 are incorporated into this Item 2.03 in their entirety by this reference to Item 1.01 of this report.

Item 3.02Unregistered Sales of Equity Securities.

As stated above in Item 1.01, the Note Balance may be converted into common stock shares or other equity securities of the Company and the Company, pursuant to the Common Stock Purchase Warrant Agreements, issued the Warrants to the Note Holder in conjunction with the debt financing.  The details of the conversion rights and the Warrants as described in Item 1.01 are incorporated into this Item 3.02 in their entirety by this reference to Item 1.01 of this report.

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Item 9.01Financial Statements and Exhibits.

(c)Exhibits.

4.1	Form of Senior Promissory Note.
4.2	Form of Common Stock Purchase Warrant Agreement attached as Exhibit A-1 to the Form of Senior Promissory Note.
4.3	Form of Common Stock Purchase Warrant Agreement attached as Exhibit A-2 to the Form of Senior Promissory Note.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DATE: August 11, 2005	GRAYMARK PRODUCTIONS, INC.
	By:	/S/ JOHN SIMONELLI
		Chief Executive Officer

EX-4.1

Exhibit 4.1

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION OF THIS NOTE HAVE BEEN ACQUIRED FOR INVESTMENT ONLY AND NOT WITH THE INTENT OF FURTHER DISTRIBUTION, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THIS NOTE AND THE SECURITIES UNDER THAT ACT UNLESS SOLD PURSUANT TO RULE 144 PROMULGATED UNDER THAT ACT OR UNLESS THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER IS OTHERWISE EXEMPT FROM REGISTRATION. GRAYMARK PRODUCTIONS, INC. MAY REQUEST A WRITTEN OPINION FROM COUNSEL AND IN FORM ACCEPTABLE TO GRAYMARK PRODUCTIONS, INC., TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH SALE, PLEDGE OR HYPOTHECATION, OR OTHER TRANSFER. THIS NOTE OR ANY SECURITY ISSUABLE UPON THE CONVERSION OF THIS NOTE MUST BE SURRENDERED TO GRAYMARK PRODUCTIONS, INC. AS A CONDITION PRECEDENT TO THE SALE, PLEDGE, HYPOTHECATION OR ANY OTHER TRANSFER OF ANY INTEREST IN THIS NOTE OR ANY SECURITY INTO WHICH THIS NOTE IS CONVERTIBLE.

GRAYMARK PRODUCTIONS, INC.

SENIOR PROMISSORY NOTE

U.S. $750,000 AUGUST 5, 2005

FOR VALUE RECEIVED, the undersigned, GRAYMARK PRODUCTIONS, INC. an Oklahoma corporation, and all of its existing subsidiaries and subsidiaries created after the date hereof (hereinafter called the “Company”), hereby promises to pay to the order of                        or any future permitted holder of this Senior Promissory Note (the “Payee”), at the principal office of the Payee set forth herein, or at such other place as the holder may designate in writing to the Company, the principal sum of SEVEN HUNDRED FIFTY THOUSAND DOLLARS (U.S. $750,000), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this Senior Promissory Note (the “Note”).

Upon the date of issuance of this Note the Company has no outstanding securities or other financial instruments that rank senior or pari-passu to this Note.

The Company shall not issue any securities or other financial instruments that rank senior or pari-passu to this Note without the prior written consent of the Payee.

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1.Principal and Interest Payments.

(a)The Company shall repay in full the entire principal balance then outstanding under this Note in the manner provided in Section 1(c) hereof on the first to occur (the “Maturity Date”) of: (i) July 27, 2007; (ii) the consummation of a Qualified Financing (as defined in Section 1(c) hereof); or (iii) the acceleration of the obligations as contemplated by this Note.  The Company may prepay all or any part of this Note, in whole or in part at any time, as set forth in Section 6(d) hereof.

(b)Interest on the outstanding principal balance of this Note shall accrue at a rate of eight percent (8%) per annum.  Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable quarterly by the Company in cash or in shares of the Company’s equity securities as contemplated in Section 1(c) hereof.  Furthermore, upon the occurrence of an Event of Default that shall be continuing for more than thirty (30) consecutive days following the Company’s receipt of Payee’s notice describing in reasonable detail the occurrence of an Event of Default, then to the extent permitted by law, the Company will pay interest to the Payee, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of eighteen percent (18%) per annum.

(c)The outstanding principal amount of this Note shall be secured by all assets of the Company including but not limited to, all purchase agreements and any such options or rights to acquire, all intellectual and real property, all assets and properties of GrayMark Productions, Inc. and all of its existing subsidiaries and subsidiaries created after the date hereof.

(d)At the Maturity Date, the outstanding principal amount of this Note plus all accrued and unpaid interest herein shall be due and payable in cash in the absence of a Qualified Financing by the Company on or before the Maturity Date or, in the event of a Qualified Financing by the Company on or before Maturity Date, automatically converted into equity securities of the Company which may be issued in connection with the Qualified Financing by the Company of its equity securities to certain investors; provided, however, the Company receives aggregate gross cash proceeds in connection with a Qualified Financing of at least $2,000,000 (excluding the conversion of this Note) occurring on or before July 27, 2007, the outstanding principal amount of this Note plus all accrued and unpaid interest herein shall automatically be converted into shares of equity securities of the Company (the “Qualified Financing”).  The principal amount of this Note plus all accrued and unpaid interest shall convert into such number of shares of equity securities of the Company equal to 120% of the principal amount of this Note and all accrued interest outstanding divided by the price per share of the equity securities sold in the Qualified Financing, the maximum price or value of the Common Stock into which the indebtedness evidenced by this Note converts shall not exceed the equivalent of $1.10 per Common Stock share.  Upon the conversion of this Note, the outstanding principal amount of this Note, together with accrued interest hereon, shall be deemed to be the consideration for the Payee’s interest in the equity securities upon consummation of the Qualified Financing.  In consideration for the loan evidenced by this Note, the Payee shall receive common

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stock purchase warrants exercisable during a five-year period for the purchase of (i) 250,000 shares of the Company’s common stock, $.001 par value (the “Common Stock”) at $2.00 per share, and (ii) 250,000 shares of Common Stock at $3.00 per share (the “Common Stock Purchase Warrants”) in the form attached to this Note as Exhibits A-1 and A-2.

2.Payment on Non-Business Days.  Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the United States of America or the State of Michigan, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

3.Representations, Warranties and Covenants of the Company.  The Company represents, warrants and covenants to the Payee as follows:

(a)The Company has been duly incorporated and is validly existing and in good standing under the laws of the state of Oklahoma, with full corporate power and authority to own, lease and operate its properties and to conduct its business as currently conducted.

(b)This Note has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and the Company has full power and authority to execute and deliver this Note and to perform its obligations hereunder.

(c)The execution, delivery and performance of this Note will not (i) conflict with or result in a breach of or a default under any of the terms or provisions of, (A) the Company’s certificate of incorporation or by-laws, or (B) any material provision of any indenture, mortgage, deed of trust or other material agreement or instrument to which the Company is a party or by which it or any of its material properties or assets is bound, (ii) result in a violation of any material provision of any law, statute, rule, regulation, or any existing applicable decree, judgment or order by any court, Federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over the Company, or any of its material properties or assets or (iii) result in the creation or imposition of any material lien, charge or encumbrance upon any material property or assets of the Company or any of its subsidiaries pursuant to the terms of any agreement or instrument to which any of them is a party or by which any of them may be bound or to which any of their property or any of them is subject.

(d)No consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Note.

(e)Upon the date of issuance of this Note the Company has no outstanding securities or other financial instruments that rank senior or pari-passu to this Note.

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The Company shall not issue any securities or other financial instruments that rank senior or pari-passu to this Note without the prior written consent of the Payee.

(f)Within ten (10) days following the occurrence of a Material Adverse Change, the Company shall provide Payee written notification describing in reasonable detail the events and circumstances constituting the basis for the Material Adverse Change. For purposes of this Note, “Material Adverse Change” shall mean (a) a material adverse change in the business, prospects, operations, results of operations, assets, liabilities or condition (financial or otherwise) of the Company taken as a whole, or (b) a material adverse change in the business, prospects, operations, results of operations, assets, liabilities or condition (financial or otherwise) of the Company, or (c) a material adverse change in the motion picture industry as it relates to the Company.

4.Events of Default.  The occurrence of any of the following events shall be an “Event of Default” under this Note:

(a)the Company shall fail to make the payment of any amount of any principal outstanding for a period of three (3) business days after the date such payment shall become due and payable hereunder; or

(b)the Company shall fail to make any payment of interest for a period of three (3) business days after the date such interest shall become due and payable hereunder; or

(c)any representation, warranty or certification made by the Company herein or in any certificate or financial statement shall prove to have been false or incorrect or breached in a material respect on the date as of which made; or

(d)the holder of any indebtedness (“Indebtedness”) of the Company or any of its subsidiaries shall accelerate any payment of any amount or amounts of principal or interest on any indebtedness (the “Indebtedness”) (other than the Indebtedness hereunder) prior to its stated maturity or payment date the aggregate principal amount of which Indebtedness of all such persons is in excess of $500,000, whether such Indebtedness now exists or shall hereinafter be created, and such accelerated payment entitles the holder thereof to immediate payment of such Indebtedness which is due and owing and such indebtedness has not been discharged in full or such acceleration has not been stayed, rescinded or annulled within ten (10) business days of such acceleration; or

(e)A judgment or order for the payment of money shall be rendered against the Company or any of its subsidiaries in excess of $500,000 in the aggregate (net of any applicable insurance coverage) for all such judgments or orders against all such persons (treating any deductibles, self insurance or retention as not so covered) that shall not be discharged, and all such judgments and orders remain outstanding, and there shall be any period of sixty (60) consecutive days following entry of the judgment or order in excess of $500,000 or the judgment or order which causes the aggregate amount described above to exceed $500,000 during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

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(f)the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or assets, (ii) admit in writing its inability to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), (v) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally, (vi) acquiesce in writing to any petition filed against it in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing; or

(g)a proceeding or case shall be commenced in respect of the Company or any of its subsidiaries without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of thirty (30) consecutive days or any order for relief shall be entered in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic) against the Company or any of its subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Company or any of its subsidiaries and shall continue undismissed, or unstayed and in effect for a period of thirty (30) consecutive days.

(h)a material impairment of the Company’s ability to perform its financial obligations, or a material impairment of the enforceability or priority of Payee’s creditor priority as a result of an action or failure to act on the part of the Company,

5.Remedies Upon An Event of Default.  If an Event of Default shall have occurred and shall be continuing for more than thirty (30) consecutive days following the Company’s receipt of Payee’s notice describing in reasonable detail the occurrence of an Event of Default, the Payee of this Note may at any time at its option, (a) declare the entire unpaid principal balance of this Note, together with all interest accrued hereon, due and payable, and thereupon, the same shall be accelerated and so due and payable; provided, however, that upon the occurrence of an Event of Default described in (i) Sections 4(f) and (g), without presentment, demand, protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Company, the outstanding principal balance and accrued interest hereunder shall be automatically due and payable, and (ii) Sections 4(a) through (e), the Payee may demand the prepayment of this Note pursuant to Section 6 hereof; or (b) exercise or otherwise enforce any one or more of the Payee’s rights, powers, privileges, remedies and interests under this Note or applicable law.  No course of delay on the part of the Payee shall operate as a waiver thereof or

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otherwise prejudice the right of the Payee.  No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise.  Notwithstanding the foregoing, Payee agrees that its rights and remedies hereunder are limited to receipt of cash or shares of the Company’s equity securities in the amounts described herein.

6.Prepayment Options.

(a)Prepayment.  Notwithstanding anything to the contrary contained herein, the Payee shall have the right, at such Payee’s option, to require the Company to prepay all of the sum of this Note at a price equal to 110% of the outstanding principal amount and any interest accrued and outstanding under this Note (the “Prepayment Price”), provided, that such prepayment is requested upon the occurrence of a Major Transaction (as defined in Section 6(e) below).  Nothing in this Section 6(a) shall limit the Payee’s rights under Section 5 hereof.

(b)Mechanics of Prepayment at Option of Payee.  At least thirty (30) days prior to the occurrence of a Major Transaction and within one (1) day after the occurrence of a Major Transaction, the Company shall deliver written notice thereof via facsimile and overnight courier (“Notice of a Prepayment Event”) to the Payee.  At any time on or after the earlier of the Payee’s receipt of a Notice of a Prepayment Event and the Payee becoming aware of a Major Transaction, the Payee may require the Company to prepay all of the outstanding principal amount and any interest accrued and outstanding under this Note by delivering written notice thereof via facsimile and overnight courier (“Notice of Prepayment at Option of Payee”) to the Company.

(c)Payment of Prepayment Price.  Upon the Company’s receipt of a Notice of Prepayment at Option of Payee from the Payee, the Company shall immediately notify the Payee by facsimile of the Company’s receipt of a Notice of Prepayment at Option of Payee and the Payee which has sent such a notice shall deliver to the Company this Note on or before the consummation or closing of a Major Transaction.    The Company shall pay the Prepayment Price to Payee at or prior to the closing of the Major Transaction; provided that this Note shall have been so delivered to the Company.  If the Company shall fail to prepay all of the Prepayment Price (other than pursuant to a dispute as to the arithmetic calculation of the Prepayment Price), in addition to any remedy the Payee may have under this Note, the Prepayment Price payable in respect of such unprepaid Notes shall bear interest at the rate of two percent (2.0%) per each period of thirty (30) consecutive days, pro rated for any period of less than thirty (30) days until paid in full.  Until the Company pays such unpaid Prepayment Price in full to the Payee, the Payee shall have the option (the “Void Optional Prepayment Option”) to, in lieu of prepayment, require the Company to promptly return to the Payee this Note that was submitted for prepayment by Payee under this Section 6(c) and for which the Prepayment Price has not been paid, by sending written notice thereof to the Company via facsimile (the “Void Optional Prepayment Notice”).   Upon the Company’s receipt of such Void Optional Prepayment Notice(s) and prior to payment of the full Prepayment Price to Payee, (i) the Notice(s) of Prepayment at Option of Payee shall be null and void with respect to this Note submitted for prepayment and for which the Prepayment Price has not been paid and (ii) the Company shall immediately return this Note submitted to the Company by the Payee for

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prepayment under this Section 6(c) and for which the Prepayment Price has not been paid.  A Payee’s delivery of a Void Optional Prepayment Notice and exercise of its rights following such notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice.

(d)Company’s Prepayment Option.  The Company may prepay, at the option of its Board of Directors, all or any portion of the outstanding principal amount of this Note and the accrued and unpaid interest thereon upon five (5) business days prior written notice to the Payee (the “Company Prepayment Notice”) at a cash price equal to 110% of the sum of the outstanding principal amount of this Note and any interest accrued and outstanding (the “Company Prepayment Price”).  The Company may not deliver a Company Prepayment Notice to the Payee unless the Company has clear and good funds for a minimum of the amount it intends to prepay in a bank account controlled by the Company.  The Company Prepayment Notice shall state the date of prepayment (the “Company Prepayment Date”), the Company Prepayment Price, the amount of the Note of such Payee to be prepaid, the amount of accrued and unpaid interest through the Company Prepayment Date and shall call upon the Payee to surrender to the Company on the Company Prepayment Date at the place designated in the Company Prepayment Notice such Payee’s Note.  The Company Prepayment Date shall be no more than five (5) trading days after the date on which the Payee is notified of the Company’s intent to prepay the Note (the “Company Prepayment Notice Date”).  If the Company fails to pay the Company Prepayment Price by the sixth (6^th) trading day following the Company Prepayment Notice Date, the prepayment will be declared null and void and the Company shall lose its right to deliver a Company Prepayment Notice to the Payee in the future.  On or after the Company Prepayment Date, the Payee shall surrender the Notes called for prepayment to the Company at the place designated in the Company Prepayment Notice and shall thereupon be entitled to receive payment of the Company Prepayment Price.

(e)For purposes of this Note, “Major Transaction” means the consummation of any of the following transactions: (i) the consolidation, merger or other business combination of the Company with or into a person or entity (other than (A) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company, or (B) a consolidation, merger or other business combination in which holders of the Company’s or any of its subsidiaries voting power immediately prior to the transaction continue after the transaction to hold, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities); (ii) the sale or transfer of all or substantially all of the Company’s or any of its subsidiaries’ assets; or (iii) the consummation of a purchase, tender or exchange offer made to the holders of more than 30% of the outstanding shares of the Company’s common stock; provided, however, the following shall not be deemed a Major Transaction for purposes of this Note: (a) the Proposed Financing; (b) a split, reverse split, dividend or distribution with respect to the common stock of the Company which has been disclosed to the Payee; (c) the tender, exchange or repricing of any securities of the Company which are convertible into shares of common stock of the Company which has been disclosed to the Payee.

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7.Replacement.  Upon receipt of a duly executed, notarized and unsecured written statement from the Payee with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Company shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

8.Parties in Interest, Transferability.  This Note shall be binding upon the Company and its successors and assigns and the terms hereof shall inure to the benefit of the Payee and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 18 of this Note, or pledged, hypothecated or otherwise granted as security by the Payee.

9.Amendments.  This Note may not be modified or amended in any manner except in writing executed by the Company and the Payee.

Notices.  Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The Company will give written notice to the Payee at least thirty (30) days prior to the date on which the Company closes its books or takes a record (x) with respect to any dividend or distribution upon the common stock of the Company, (y) with respect to any pro rata subscription offer to holders of common stock of the Company or (z) for determining rights to vote with respect to a Major Transaction, dissolution, liquidation or winding-up and in no event shall such notice be provided to such holder prior to such information being made known to the public.  The Company will also give written notice to the Payee at least twenty (20) days prior to the date on which dissolution, liquidation or winding-up will take place.

Address of the Payee:		SXJE, LLC.
		2400 Bryon Circle
		Lansing, MI 48912
		Attention: Sam Eyde
		(517) 333-3430
Address of the Company:	GrayMark Productions, Inc.
		101 North Robinson, Suite 920
		Oklahoma City, OK 73102
		Attention: John Simonelli, CEO
		(405) 601-5300

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10.Governing Law. This Note shall be governed by and construed in accordance with the internal laws of the State of Michigan, without giving effect to the choice of law provisions.  This Note shall not be interpreted or construed with any presumption against the party causing this Note to be drafted.

11.Headings.  Article and section headings in this Note are included herein for purposes of convenience of reference only and shall not constitute a part of this Note for any other purpose.

12.Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Payee’s right to pursue actual damages for any failure by the Company to comply with the terms of this Note.  Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Payee and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).

13.Failure or Indulgence Not Waiver.  No failure or delay on the part of the Payee in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

14.Enforcement Expenses.  The Company agrees to pay all costs and expenses of enforcement of this Note, including, without limitation, reasonable attorneys’ fees and expenses.

15.Binding Effect.   The obligations of the Company and the Payee set forth herein shall be binding upon the successors and assigns of each such party, whether or not such successors or assigns are permitted by the terms hereof.

16.Compliance with Securities Laws.  The Payee of this Note acknowledges that this Note is being acquired solely for the Payee’s own account and not as a nominee for any other party, and for investment, and that the Payee shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission.  This Note and any Note issued in substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR GRAYMARK

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PRODUCTIONS INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.”

17.Severability.  The provisions of this Note are severable, and if any provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall not in any manner affect such provision in any other jurisdiction or any other provision of this Note in any jurisdiction.

18.Consent to Jurisdiction.  Each of the Company and the Payee (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Western District of Michigan and the courts of the State of Michigan located in Ingham county for the purposes of any suit, action or proceeding arising out of or relating to this Note and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper.  Each of the Company and the Payee consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in Section 11 hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing in this Section 20 shall affect or limit any right to serve process in any other manner permitted by law.

19.Company Waivers.  Except as otherwise specifically provided herein, the Company and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Company liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.

(a)No delay or omission on the part of the Payee in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Payee, nor shall any waiver by the Payee of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion.

(b)THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE PAYEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

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IN WITNESS WHEREOF, the Company has executed and delivered this Note as of the date first written above.

GRAYMARK PRODUCTIONS, INC.
By:
	John Simonelli, CEO

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EX-4.2

EXHIBIT 4.2

August 5, 2005

COMMON STOCK PURCHASE WARRANT AGREEMENT

This COMMON STOCK PURCHASE WARRANT AGREEMENT (this “Warrant Agreement” or “Agreement”), dated as of August 5,  2005, is between GrayMark Productions, Inc. (the “Company”) and                    (the “Warrant Holder” and with the Company sometimes referred to as “parties” collectively and as “party” individually.

W I T N E S S E T H:

WHEREAS, this Warrant Agreement is executed by the Company pursuant to the Convertible Loan Note on the date of this Agreement (the “Convertible Note”) and delivered with Convertible Note to the Warrant Holder;

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Grant and Period.  The above recitals are true and correct.  This Agreement is executed and delivered pursuant to the Convertible Note issued by the Company.  Pursuant to this Agreement, the Warrant Holder is hereby granted the right to purchase from the Company, at any time during the period commencing on the date of this Agreement and ending on August 5, 2010 (the “Expiration Time”), 250,000 shares of the Company’s common stock, $.0001 par value (the “Shares” or “Warrant Securities”)) at an initial exercise price (subject to adjustment as provided in Article 8 hereof) of $2.00 per share (the “Exercise Price” or “Purchase Price”), subject to the terms and conditions of this Agreement (the “Warrant”).

Except as specifically otherwise provided herein, the Shares shall have the same terms and conditions as such securities are outstanding and as designated in the Company’s Certificate of Incorporation and any amendments thereto, and the Warrant Holder shall have registration rights under the Securities Act of 1933, as amended, covering the Warrant Securities, as more fully described in Section 7 of this Agreement.

2.Warrant Certificate.  The Warrant Holder’s rights pursuant to this Agreement shall only be evidenced by this Agreement and will not be certificated.

3.Exercise of Warrant.

3.1Exercise.  The Warrant Holder may effect a cash exercise of the Warrant by surrendering to the Company this Agreement, together with a Subscription in the form of Exhibit ”A” attached to this Agreement, duly executed by the Warrant Holder, at any time prior to the Expiration Time, at the Company’s principal office, accompanied by payment in cash or by certified or official bank check payable to the order of the Company in the amount of the aggregate purchase price (the “Aggregate Price”), subject to any adjustments provided for in this Agreement.  The Aggregate Price shall be equal to the exercise price as set forth in Section 6 of this Agreement multiplied by the number of Warrant Securities for which the Warrant shall be exercised (as adjusted as provided in this Agreement).

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3.2Partial Exercise.  In the event the Warrant shall be exercised in part and not in whole, the Company, at its expense, will forthwith issue to the Warrant Holder a new warrant agreement of like tenor exercisable for the number of Warrant Securities (as constituted as of the date hereof) for which this Warrant Agreement shall not have been exercised, issued in the name of the Warrant Holder or as the Warrant Holder (upon payment by the Warrant Holder of any applicable transfer taxes) may direct.

4.Issuance of Certificates Evidencing the Warrant Securities.  Upon the exercise of the Warrants, the issuance of certificates for the Warrant Securities shall be made as soon as reasonably practicable thereafter without charge to the Warrant Holder including, without limitation, any tax which may be payable in respect of the issuance thereof, and such certificates shall (subject to the provisions of Sections 5 and 7 of this Agreement) be issued in the name of, or in such names as may be directed by, the Holder thereof; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Warrant Holder, and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

The Warrant Certificates and the certificates representing the Warrant Securities shall be executed on behalf of the Company by the manual or facsimile signature of the then present Chairman or Vice Chairman of the Board of Directors or Chief Executive Officer, President or Vice President of the Company, attested to by the manual or facsimile signature of the then present Secretary or Assistant Secretary of the Company.  Warrant Certificates shall be dated the date of execution by the Company upon initial issuance, division, exchange, substitution or transfer.

5.Restriction On Transfer of Warrants.  This Warrant Agreement may be assigned or transferred, in whole or in part, as provided herein so long as such assignment or transfer is in accordance with and subject to the provisions of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (said Act and such rules and Regulations being hereinafter collectively referred to as the “Securities Act”).  Any purported transfer or assignment made other than in accordance with this Section 5 shall be null and void and of no force and effect.  Any assignment permitted under this Agreement shall be made by surrender of this Agreement to the Company with the Assignment Form attached to this Agreement as Exhibit ”C” duly executed and funds sufficient to pay any transfer tax.  In such event the Company shall, without charge, execute and deliver a new warrant agreement in the name of the assignee named in the Assignment Form and designate the assignee as the warrant holder under the new warrant agreement and this Agreement shall promptly be canceled.  This Agreement may be divided or combined with other warrant agreement that carry the same rights by presentation of this Agreement to the Company together with the Assignment Form signed by the Warrant Holder, specifying the names and denominations in which the new warrant agreements are to be issued.

6.Exercise Price.

6.1Initial and Adjusted Exercise Prices.  The initial exercise price of each Common Stock Warrant shall be $2.00 per Share.  The adjusted exercise price shall be the price which shall result from time to time from any and all adjustments of the initial exercise price in accordance with the provisions of Section 8 of this Agreement.  The term “Exercise Price” herein shall mean the initial exercise price or the adjusted exercise price, depending upon the context.

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7.Registration Rights.

7.1Registration Under the Securities Act of 1933.

The Warrant and the Warrant Securities have not been registered under the Securities Act.  Upon exercise, in part or in whole, of the Warrant, certificates representing the Warrant Securities shall bear the following legend in the event there is no current registration statement effective with the U. S. Securities and Exchange Commission (the “Commission”) at such time as to such securities:

The securities represented by this certificate may not be offered or sold except pursuant to (i) an effective registration statement under the Act, (ii) to the extent applicable, Rule 144 under the Act (or any similar rule under such Act relating to the disposition of securities), or (iii) an opinion of counsel, if such opinion shall be reasonably satisfactory to counsel to the issuer, that an exemption from registration under such Act and applicable state securities laws is available.

7.2Piggyback Registration.

If, at any time commencing after July 27, 2005 and expiring July 27, 2010, the Company prepares and files an amendment to a registration statement, or a new registration statement under the Act, or files a Notification on Form 1-A or otherwise registers securities under the Act, or files a similar disclosure document with the Commission (collectively the “Registration Documents”) as to any of its securities under the Securities Act (other than under a Registration Statement pursuant to Form S-8 or Form S-4), the Company will give written notice by registered mail, at least thirty (30) days prior to the filing of each such Registration Document, to the Warrant Holder and holders of the Warrant Securities of the Company’s intention to do so.  If the Warrant Holder or any holder of the Warrant Securities notifies the Company within 20 days after receipt of any such notice of its desire to include any Warrant Securities in such proposed Registration Documents, the Company shall afford the Warrant Holder or holder of the Warrant Securities the opportunity to have any Warrant Securities registered under such Registration Documents or any other available Registration Document.

Notwithstanding the provisions of this Section 7.2, the Company shall have the right at any time after it shall have given written notice pursuant to this Section 7.2 (irrespective of whether a written request for inclusion of any such securities shall have been made) to elect not to file any such proposed amendment or registration statement, or to withdraw the same after the filing but prior to the effective date of the Registration Document.

7.3Demand Registration.  Omitted.

7.4Covenants of the Company With Respect to Registration.  In connection with the filing of any Registration Document by the Company, the Company covenants and agrees as follows:

(a)The Company shall use its best efforts to file the Registration Document on the date indicated in the notice delivered to the Warrant Holder and the holders of the Warrant Securities pursuant to Section 7.2 or as soon as reasonably practicable thereafter and shall use its best efforts to have any such Registration Document declared effective at the earliest practicable time.  The Company will promptly notify each of the Warrant Holder and holder of Warrant Securities electing to include Warrant Securities in the Registration Document (collectively the “Selling Securities Holders”) and confirm in writing, (i) when such Registration Document becomes effective, (ii) when any post-effective amendment to such Registration Document becomes effective and (iii) of any request by the SEC for any amendment or supplement to such Registration Document or any prospectus relating thereto or for additional information.

The Company shall furnish to each Selling Securities Holder such number of copies of such Registration Document (or prospectus contained therein) and of each such amendment and supplement thereto (in each case including each preliminary prospectus and summary prospectus) in conformity with the requirements of the Securities Act, and such other documents as the Selling Securities Holders may reasonably request in order to facilitate the disposition of the Warrant Securities included in the Registration Document.

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(b)The Company shall pay all costs (excluding transfer taxes, if any, and fees and expenses of Holder(s)’ counsel and the Holder’s pro-rata portion of the selling discount or commissions), fees and expenses in connection with all Registration Documents filed pursuant to Sections 7.2 hereof including, without limitation, the Company’s legal and accounting fees, printing expenses, blue sky fees and expenses.  If the Company shall fail to comply with the provisions of Section 7.4(a), the Company shall, in addition to any other equitable or other relief available to the Selling Securities Holders, be liable for any or all special and consequential damages sustained by the Selling Securities Holders.

(c)The Company shall prepare and file with the SEC such amendments and supplements to such Registration Document and the prospectus used in connection therewith as may be reasonably necessary to keep such Registration Document effective for at least nine months (or such longer period as permitted by the Act), and to comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Document during such period in accordance with the intended methods of disposition by the Selling Securities Holders of the Warrant Securities set forth in such Registration Document.  If at any time the SEC should institute or threaten to institute any proceedings for the purpose of issuing a stop order suspending the effectiveness of any such Registration Document, the Company shall promptly notify each Selling Securities Holder and will use all reasonable efforts to prevent the issuance of any such stop order or to obtain the withdrawal thereof as soon as possible.  The Company will use its good faith reasonable efforts and take all reasonably necessary action which may be required in qualifying or registering the Warrant Securities included in the Registration Document for offering and sale under the securities or blue sky laws of such states as reasonably are required by the Selling Securities Holders; provided that the Company shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction, nor shall the officers, directors and five percent (5%) or greater shareholder be required to deposit in escrow and securities of the Company owned by them or subject such securities to any form of lockup arrangement in connection with such registration.  The Company shall use its good faith reasonable efforts to cause the Warrant Securities covered by such Registration Document to be registered with or approved by such other governmental agencies or authorities of the United States or any State thereof as may be reasonably necessary to enable the Selling Security Holders to consummate the disposition of the Warrant Securities included in the Registration Document.

(d)The Company shall indemnify the Selling Securities Holders and each person, if any, who controls any Selling Securities Holder within the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from such registration statement.

(e)If requested by the Company prior to the filing of any Registration Document covering the Warrant Securities, each of the Selling Securities Holders and their successors and assigns, shall severally, and not jointly, indemnify the Company, its officers and directors and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from written information furnished by the Selling Securities Holder, or their successors or assigns, for specific inclusion in the Registration Document.

(f)Nothing contained in this Agreement shall be construed as requiring the Warrant Holder to exercise the Warrants prior to the filing of any Registration Document or the effectiveness thereof.

(g)Notwithstanding the provisions of Section 7.2 of this Agreement, the Company shall not be required to effect or cause the registration of any Warrant Securities pursuant to Section 7.2 hereof if, within 30 days after its receipt of a request to include Warrant Securities within the Registration Document (i) counsel for the Company delivers an opinion to the Selling Securities Holder, in form and substance satisfactory to counsel to the Selling Securities Holder, to the effect that the entire number of Warrant Securities proposed to be sold by such Selling Securities Holder may otherwise be sold, in the manner proposed by the Selling Securities Holder, without registration under the Securities Act, or (ii) the SEC shall have issued a no-action position, in form and substance satisfactory to counsel for the Selling Securities Holder, to the effect that the entire number of Warrant Securities

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proposed to be sold by the Selling Securities Holder may be sold by it, in the manner proposed by the Selling Securities Holder, without registration under the Securities Act.

8.Adjustments to Exercise Price and Number of Securities.

8.1Adjustment for Dividends, Subdivisions, Combinations or Reclassifications.  In case the Company shall (a) pay a dividend or make a distribution in shares of its capital stock (whether shares of its common stock, $.0001 par value (“Common Stock”)  or of capital stock of any other class), (b) subdivide its outstanding shares of Common Stock into a greater number of shares, (c) combine its outstanding shares of Common Stock into a smaller number of shares, or (d) issue by reclassification of its shares of Common Stock any shares of capital stock of the Company; then, and in each such case, the per share Exercise Price and the number of Warrant Securities in effect immediately prior to such action shall be adjusted so that the Warrant Holder of this Warrant thereafter upon the exercise hereof shall be entitled to receive the number and kind of shares of the Company which the Warrant Holder would have owned immediately following such action had the Warrant been exercised immediately prior thereto.  An adjustment made pursuant to this Section shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.  If, as a result of an adjustment made pursuant to this Section, the Warrant Holder shall become entitled to receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall reasonably determine the allocation of the adjusted Exercise Price between or among shares of such class of capital stock.

Immediately upon any adjustment of the Exercise Price pursuant to this Section, the Company shall send written notice thereof to the Warrant Holder (by first class mail, postage prepaid), which notice shall state the Exercise Price resulting from such adjustment, and any increase or decrease in the number of Warrant Securities to be acquired upon exercise of the Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

8.2Adjustment For Reorganization, Merger or Consolidation.  In case of any reorganization of the Company or consolidation of the Company with, or merger of the Company with, or merger of the Company into, another corporation (other than a consolidation or merger that does not result in any reclassification or change of the outstanding Common Stock), the corporation formed by such consolidation or merger shall execute and deliver to the Warrant Holder a supplemental Warrant Agreement providing that the Warrant Holder shall have the right thereafter (until the Expiration Date) to receive, upon exercise of such warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or merger, by a holder of the number of shares of Common Stock of the Company for which the Warrant might have been exercised immediately prior to such reorganization, consolidation, merger, conveyance, sale or transfer.  Such supplemental Warrant Agreement shall provide for adjustments which shall be identical to the adjustments provided in Section 8.1 and such registration rights and other rights as provided in this Agreement.  The Company shall not effect any such consolidation, merger, or similar transaction as contemplated by this paragraph, unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing, receiving, or leasing such assets or other appropriate corporation or entity shall assume, by written instrument executed and delivered to the Warrant Holder, the obligation to deliver to the Warrant Holder, such shares of stock, securities, or assets as, in accordance with the foregoing provisions, such Warrant Holder may be entitled to purchase, and to perform the other obligations of the Company under this Agreement.  The above provision of this Section shall similarly apply to successive consolidations or successively whenever any event listed above shall occur.

8.3Dividends and Other Distributions.  In the event that the Company shall at any time prior to the earlier of (i) exercise of all of the Warrant or (ii) the Expiration Date, distribute to its shareolders any assets, property, rights, evidences of indebtedness, securities (other than a distribution made as a cash dividend payable out of earnings or out of any earned surplus legally available for dividends under the laws of the jurisdictions of incorporation of the Company), whether issued by the Company or by another, the Warrant Holder shall thereafter be entitled, in addition to the Shares or other Warrant Securities and property receivable upon the exercise thereof, to receive, upon the exercise of the Warrant, the same property, assets, rights, evidences of indebtedness, securities or any other thing of value that the Warrant Holder would have been entitled to receive at the time of such distribution as if the Warrant had been exercised immediately prior to such distribution.  At the time of any such

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distribution, the Company shall make appropriate reserves to ensure the timely performance of the provisions of this Section or an adjustment to the Exercise Price, which shall be effective as of the day following the record date for such distribution.

8.4Adjustment in Number of Securities.  Upon each adjustment of the Exercise Price pursuant to the provisions of this Section 8, the number of securities issuable upon the exercise of the Warrant shall be adjusted to the nearest full amount by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of securities issuable upon exercise of the Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

8.5No Adjustment of Exercise Price in Certain Cases.  No adjustment of the Exercise Price shall be made if the amount of said adjustment shall be less than one cent ($.01) per Share, provided, however, that in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment so carried forward, shall amount to at least one cent ($.01) per Share.

8.6Accountant’s Certificate of Adjustment.  In each case of an adjustment or readjustment of the Exercise Price or the number of any securities issuable upon exercise of the Warrant, the Company, at its expense, shall cause independent certified public accountants of recognized standing selected by the Company (who may be the independent certified public accountants then auditing the books of the Company) to compute such adjustment or readjustment in accordance herewith and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to the Warrant Holder at the Warrant Holder’s address as shown on the Company’s books.  The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based including, but not limited to, a statement of (i) the Exercise Price at the time in effect, and (ii) the number of additional or fewer securities and the type and amount, if any, of other property which at the time would be receivable upon exercise of the Warrant.

9.Replacement of Warrant Certificates.  Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant Agreement, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrant Agreement, if mutilated, the Company will make and deliver a new Warrant Agreement of like tenor, in lieu thereof.

10.Elimination of Fractional Interest.  The Company shall not be required to issue certificates representing fractions of shares of Common Stock or other Warrant Securities upon the exercise of the Warrant, nor shall it be required to issue script or pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests may be eliminated, at the Company’s option, by rounding any fraction up to the nearest whole number of Share or other Warrant Securities, properties or rights, or in lieu thereof paying cash equal to such fractional interest multiplied by the current value of the Share or other Warrant Security.

11.Reservation, Validity and Listing.  The Company covenants and agrees that during the Exercise Period, the Company shall at all times reserve and keep available out of its authorized shares of Common Stock or other authorized Warrant Securities, solely for the purpose of issuance upon the exercise of the Warrant, such number of shares of Common Stock or other Warrant Securities, properties or rights as shall be issuable upon the exercise of the Warrant.  The Company covenants and agrees that, upon exercise of the Warrant, and payment of the Exercise Price therefor (if applicable), all shares of Common Stock and other Warrant Securities issuable upon such exercise shall be duly authorized, validly issued, fully paid, non-assessable and not subject to the preemptive rights.

12.Notices to Warrant Holder.  Nothing contained in this Agreement shall be construed as conferring upon the Warrant Holder the right to vote or to consent or to receive notice as a stockholder in respect of any meetings of shareholders for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company.  If, however, at any time prior to the expiration of the Warrant and its exercise, any of the following events shall occur:

(a)the Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or

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distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; or

(b)the Company shall offer to all the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor; or

(c)a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed;

then, in any one or more of said events, the Company shall give written notice of such event at least 15 days prior to the date fixed as a record date of the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale.  Such notices shall specify such record date or the date of closing the transfer books, as the case may be.

13.Notices.  All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly given when sent (i) by facsimile and (ii) delivered personally or by overnight courier or mailed by registered or certified mail, return receipt requested:

(a)If to the Warrant Holder or holders of the Warrant Securities, to its address as shown on the books of the Company; or

(b)If to the Company, to the address set forth below or to such other address as the Company may designate by notice to the Warrant Holder.

John Simonelli

Chief Executive Officer

GrayMark Productions, Inc.

101 North Robinson, Suite 920

Oklahoma City, Oklahoma 73102

15.Entire Agreement: Modification.  This Agreement contains the entire understanding between the parties with respect to the subject matter hereof, and the terms and provisions of this Agreement may not be modified, waived or amended except in a writing executed by the Company and the Warrant Holder.

16.Successors.  All the covenants and provisions of this Agreement shall be binding upon and inure to the benefit of the Company, Warrant Holder and the holders of the Warrant Securities and their respective successors and assigns.

17.Termination.  This Agreement shall terminate at the earlier of (i) the public sale of all of the Warrant Securities, or (ii) at the close of business on July 27, 2010.  Notwithstanding the foregoing, the indemnification provisions of Section 7 shall survive such termination.

18.Governing Law; Submission to Jurisdiction.  This Agreement shall be deemed to be a contract made under the laws of the State of Michigan and for all purposes shall be construed in accordance with the laws of said State without giving effect to the rules of said State governing the conflicts of laws.  The Company and the Warrant Holder hereby agree that any action, proceeding or claim arising out of, or relating in any way to, this Agreement shall be brought and enforced in a federal or state court of competent jurisdiction with venue only in (i) the Ingham County District Court in the State of Michigan, or (ii) the United States District Court for the Western District of Michigan, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.  The Company and the Warrant Holder hereby irrevocably waive any objection to such exclusive jurisdiction or inconvenient forum.  A party to this Agreement named as a defendant in any action brought in connection with this Agreement in any court outside of the above named designated county or district shall have the right to have the venue of said action changed to the above designated county or district or, if necessary, have the case dismissed,

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requiring the other party to refile such action in an appropriate court in the above designated county or federal district.

19.Severability.  If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement.

20.Captions.  The caption headings of the Sections of this Agreement are for convenience of reference only and are not intended, nor should they be construed as, a part of this Agreement and shall be given no substantive effect.

21.Benefits of this Agreement.  Nothing in this Agreement shall be construed to give to any person or corporation other than the Company and the Warrant Holder and holders of the Warrant Securities any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Company and the Warrant Holder and any holder of the Warrant Securities.

22.Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

“Company”	GRAYMARK PRODUCTIONS, INC.
	By:
	John Simonelli, Chief Executive Officer
Attest:
Mark R. Kidd, Secretary
“Warrant Holder”
	Signature for an individual, including
	joint tenants and tenants in common:
(Signature)	(Signature)
Name (typed or printed)	Name (typed or printed)
Date: August 5, 2005.	Date: August 5, 2005.

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EXHIBIT ”A”

FORM OF SUBSCRIPTION (CASH EXERCISE)

(To be signed only upon exercise of Warrant)

TO:GrayMark Productions, Inc.

101 North Robinson, Suite 920

Oklahoma City, Oklahoma 73102

The undersigned, the Warrant Holder, hereby irrevocably elects to exercise the purchase right provided by the Warrant Agreement for, and to purchase thereunder,                          Shares of GrayMark Productions, Inc. (the “Company”), and herewith makes payment of $                               therefor, and requests that the certificates for such securities be issued in the name of, and delivered to,                                                                                                     , whose address is                                                                                                                                                                 , all in accordance with the Warrant Agreement.

Dated:
	(Signature must conform in all respects to name of Holder as specified on the face of the Warrant Agreement)
	(Address)
	(Social Security Number or
	Tax Identification Number)

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EXHIBIT ”B”

FORM OF SUBSCRIPTION (CASHLESS EXERCISE)

(Intentionally Blank)

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EXHIBIT ”C”

FORM OF ASSIGNMENT

(To be exercised by the Warrant Holder if the

Warrant Holder desires to transfer the Warrant Agreement.)

FOR VALUE RECEIVED                                                                                  hereby sells, assigns and transfers unto

                                                                                                                                                      &nbs p;                                   

(Print name and address of transferee)

the Warrant Agreement, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                                                                                                                      Attorney, to transfer the Warrant Agreement on the books of GrayMark Productions, Inc., with full power of substitution.

Dated:
	(Signature must conform in all respects to name of Holder as specified on the face of the Warrant Agreement)
	Address of Assignee:
	(Social Security Number or
	Tax Identification Number
	of Assignee)

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EX-4.3

EXHIBIT 4.3

August 5, 2005

COMMON STOCK PURCHASE WARRANT AGREEMENT

This COMMON STOCK PURCHASE WARRANT AGREEMENT (this “Warrant Agreement” or “Agreement”), dated as of August 5, 2005, is between GrayMark Productions, Inc. (the “Company”) and                                      (the “Warrant Holder” and with the Company sometimes referred to as “parties” collectively and as “party” individually.

W I T N E S S E T H:

WHEREAS, this Warrant Agreement is executed by the Company pursuant to the Convertible Loan Note on the date of this Agreement (the “Convertible Note”) and delivered with Convertible Note to Warrant Holder;

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Grant and Period.  The above recitals are true and correct.  This Agreement is executed and delivered pursuant to the Convertible Note issued by the Company.  Pursuant to this Agreement, the Warrant Holder is hereby granted the right to purchase from the Company, at any time during the period commencing on the date of this Agreement and ending on August 5, 2010 (the “Expiration Time”), 250,000 shares of the Company’s common stock, $.0001 par value (the “Shares” or “Warrant Securities”)) at an initial exercise price (subject to adjustment as provided in Article 8 hereof) of $3.00 per share (the “Exercise Price” or “Purchase Price”), subject to the terms and conditions of this Agreement (the “Warrant”).

Except as specifically otherwise provided herein, the Shares shall have the same terms and conditions as such securities are outstanding and as designated in the Company’s Certificate of Incorporation and any amendments thereto, and the Warrant Holder shall have registration rights under the Securities Act of 1933, as amended, covering the Warrant Securities, as more fully described in Section 7 of this Agreement.

2.Warrant Certificate.  The Warrant Holder’s rights pursuant to this Agreement shall only be evidenced by this Agreement and will not be certificated.

3.Exercise of Warrant.

3.1Exercise.  The Warrant Holder may effect a cash exercise of the Warrant by surrendering to the Company this Agreement, together with a Subscription in the form of Exhibit ”A” attached to this Agreement, duly executed by the Warrant Holder, at any time prior to the Expiration Time, at the Company’s principal office, accompanied by payment in cash or by certified or official bank check payable to the order of the Company in the amount of the aggregate purchase price (the “Aggregate Price”), subject to any adjustments provided for in this Agreement.  The Aggregate Price shall be equal to the exercise price as set forth in Section 6 of this Agreement multiplied by the number of Warrant Securities for which the Warrant shall be exercised (as adjusted as provided in this Agreement).

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3.2Partial Exercise.  In the event the Warrant shall be exercised in part and not in whole, the Company, at its expense, will forthwith issue to the Warrant Holder a new warrant agreement of like tenor exercisable for the number of Warrant Securities (as constituted as of the date hereof) for which this Warrant Agreement shall not have been exercised, issued in the name of the Warrant Holder or as the Warrant Holder (upon payment by the Warrant Holder of any applicable transfer taxes) may direct.

4.Issuance of Certificates Evidencing the Warrant Securities.  Upon the exercise of the Warrants, the issuance of certificates for the Warrant Securities shall be made as soon as reasonably practicable thereafter without charge to the Warrant Holder including, without limitation, any tax which may be payable in respect of the issuance thereof, and such certificates shall (subject to the provisions of Sections 5 and 7 of this Agreement) be issued in the name of, or in such names as may be directed by, the Holder thereof; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Warrant Holder, and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

The Warrant Certificates and the certificates representing the Warrant Securities shall be executed on behalf of the Company by the manual or facsimile signature of the then present Chairman or Vice Chairman of the Board of Directors or Chief Executive Officer, President or Vice President of the Company, attested to by the manual or facsimile signature of the then present Secretary or Assistant Secretary of the Company.  Warrant Certificates shall be dated the date of execution by the Company upon initial issuance, division, exchange, substitution or transfer.

5.Restriction On Transfer of Warrants.  This Warrant Agreement may be assigned or transferred, in whole or in part, as provided herein so long as such assignment or transfer is in accordance with and subject to the provisions of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (said Act and such rules and Regulations being hereinafter collectively referred to as the “Securities Act”).  Any purported transfer or assignment made other than in accordance with this Section 5 shall be null and void and of no force and effect.  Any assignment permitted under this Agreement shall be made by surrender of this Agreement to the Company with the Assignment Form attached to this Agreement as Exhibit ”C” duly executed and funds sufficient to pay any transfer tax.  In such event the Company shall, without charge, execute and deliver a new warrant agreement in the name of the assignee named in the Assignment Form and designate the assignee as the warrant holder under the new warrant agreement and this Agreement shall promptly be canceled.  This Agreement may be divided or combined with other warrant agreement that carry the same rights by presentation of this Agreement to the Company together with the Assignment Form signed by the Warrant Holder, specifying the names and denominations in which the new warrant agreements are to be issued.

6.Exercise Price.

6.1Initial and Adjusted Exercise Prices.  The initial exercise price of each Common Stock Warrant shall be $3.00 per Share.  The adjusted exercise price shall be the price which shall result from time to time from any and all adjustments of the initial exercise price in accordance with the provisions of Section 8 of this Agreement.  The term “Exercise Price” herein shall mean the initial exercise price or the adjusted exercise price, depending upon the context.

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7.Registration Rights.

7.1Registration Under the Securities Act of 1933.

The Warrant and the Warrant Securities have not been registered under the Securities Act.  Upon exercise, in part or in whole, of the Warrant, certificates representing the Warrant Securities shall bear the following legend in the event there is no current registration statement effective with the U.S. Securities and Exchange Commission (the “Commission”) at such time as to such securities:

The securities represented by this certificate may not be offered or sold except pursuant to (i) an effective registration statement under the Act, (ii) to the extent applicable, Rule 144 under the Act (or any similar rule under such Act relating to the disposition of securities), or (iii) an opinion of counsel, if such opinion shall be reasonably satisfactory to counsel to the issuer, that an exemption from registration under such Act and applicable state securities laws is available.

7.2Piggyback Registration.

If, at any time commencing after July 27, 2005 and expiring July 27, 2010, the Company prepares and files an amendment to a registration statement, or a new registration statement under the Act, or files a Notification on Form 1-A or otherwise registers securities under the Act, or files a similar disclosure document with the Commission (collectively the “Registration Documents”) as to any of its securities under the Securities Act (other than under a Registration Statement pursuant to Form S-8 or Form S-4), the Company will give written notice by registered mail, at least thirty (30) days prior to the filing of each such Registration Document, to the Warrant Holder and holders of the Warrant Securities of the Company’s intention to do so.  If the Warrant Holder or any holder of the Warrant Securities notifies the Company within 20 days after receipt of any such notice of its desire to include any Warrant Securities in such proposed Registration Documents, the Company shall afford the Warrant Holder or holder of the Warrant Securities the opportunity to have any Warrant Securities registered under such Registration Documents or any other available Registration Document.

Notwithstanding the provisions of this Section 7.2, the Company shall have the right at any time after it shall have given written notice pursuant to this Section 7.2 (irrespective of whether a written request for inclusion of any such securities shall have been made) to elect not to file any such proposed amendment or registration statement, or to withdraw the same after the filing but prior to the effective date of the Registration Document.

7.3Demand Registration.  Omitted.

7.4Covenants of the Company With Respect to Registration.  In connection with the filing of any Registration Document by the Company, the Company covenants and agrees as follows:

(a)The Company shall use its best efforts to file the Registration Document on the date indicated in the notice delivered to the Warrant Holder and the holders of the Warrant Securities pursuant to Section 7.2 or as soon as reasonably practicable thereafter and shall use its best efforts to have any such Registration Document declared effective at the earliest practicable time.  The Company will promptly notify each of the Warrant Holder and holder of Warrant Securities electing to include Warrant Securities in the Registration Document (collectively the “Selling Securities Holders”) and confirm in writing, (i) when such Registration Document becomes effective, (ii) when any post-effective amendment to such Registration Document becomes effective and (iii) of any request by the SEC for any amendment or supplement to such Registration Document or any prospectus relating thereto or for additional information.

The Company shall furnish to each Selling Securities Holder such number of copies of such Registration Document (or prospectus contained therein) and of each such amendment and supplement thereto (in each case including each preliminary prospectus and summary prospectus) in conformity with the requirements of the Securities Act, and such other documents as the Selling Securities Holders may reasonably request in order to facilitate the disposition of the Warrant Securities included in the Registration Document.

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(b)The Company shall pay all costs (excluding transfer taxes, if any, and fees and expenses of Holder(s)’ counsel and the Holder’s pro-rata portion of the selling discount or commissions), fees and expenses in connection with all Registration Documents filed pursuant to Sections 7.2 hereof including, without limitation, the Company’s legal and accounting fees, printing expenses, blue sky fees and expenses.  If the Company shall fail to comply with the provisions of Section 7.4(a), the Company shall, in addition to any other equitable or other relief available to the Selling Securities Holders, be liable for any or all special and consequential damages sustained by the Selling Securities Holders.

(c)The Company shall prepare and file with the SEC such amendments and supplements to such Registration Document and the prospectus used in connection therewith as may be reasonably necessary to keep such Registration Document effective for at least nine months (or such longer period as permitted by the Act), and to comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Document during such period in accordance with the intended methods of disposition by the Selling Securities Holders of the Warrant Securities set forth in such Registration Document.  If at any time the SEC should institute or threaten to institute any proceedings for the purpose of issuing a stop order suspending the effectiveness of any such Registration Document, the Company shall promptly notify each Selling Securities Holder and will use all reasonable efforts to prevent the issuance of any such stop order or to obtain the withdrawal thereof as soon as possible.  The Company will use its good faith reasonable efforts and take all reasonably necessary action which may be required in qualifying or registering the Warrant Securities included in the Registration Document for offering and sale under the securities or blue sky laws of such states as reasonably are required by the Selling Securities Holders; provided that the Company shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction, nor shall the officers, directors and five percent (5%) or greater shareholder be required to deposit in escrow and securities of the Company owned by them or subject such securities to any form of lockup arrangement in connection with such registration.  The Company shall use its good faith reasonable efforts to cause the Warrant Securities covered by such Registration Document to be registered with or approved by such other governmental agencies or authorities of the United States or any State thereof as may be reasonably necessary to enable the Selling Security Holders to consummate the disposition of the Warrant Securities included in the Registration Document.

(d)The Company shall indemnify the Selling Securities Holders and each person, if any, who controls any Selling Securities Holder within the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from such registration statement.

(e)If requested by the Company prior to the filing of any Registration Document covering the Warrant Securities, each of the Selling Securities Holders and their successors and assigns, shall severally, and not jointly, indemnify the Company, its officers and directors and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from written information furnished by the Selling Securities Holder, or their successors or assigns, for specific inclusion in the Registration Document.

(f)Nothing contained in this Agreement shall be construed as requiring the Warrant Holder to exercise the Warrants prior to the filing of any Registration Document or the effectiveness thereof.

(g)Notwithstanding the provisions of Section 7.2 of this Agreement, the Company shall not be required to effect or cause the registration of any Warrant Securities pursuant to Section 7.2 hereof if, within 30 days after its receipt of a request to include Warrant Securities within the Registration Document (i) counsel for the Company delivers an opinion to the Selling Securities Holder, in form and substance satisfactory to counsel to the Selling Securities Holder, to the effect that the entire number of Warrant Securities proposed to be sold by such Selling Securities Holder may otherwise be sold, in the manner proposed by the Selling Securities Holder, without registration under the Securities Act, or (ii) the SEC shall have issued a no-action position, in form and substance satisfactory to counsel for the Selling Securities Holder, to the effect that the entire number of Warrant Securities

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proposed to be sold by the Selling Securities Holder may be sold by it, in the manner proposed by the Selling Securities Holder, without registration under the Securities Act.

8.Adjustments to Exercise Price and Number of Securities.

8.1Adjustment for Dividends, Subdivisions, Combinations or Reclassifications.  In case the Company shall (a) pay a dividend or make a distribution in shares of its capital stock (whether shares of its common stock, $.0001 par value (“Common Stock”)  or of capital stock of any other class), (b) subdivide its outstanding shares of Common Stock into a greater number of shares, (c) combine its outstanding shares of Common Stock into a smaller number of shares, or (d) issue by reclassification of its shares of Common Stock any shares of capital stock of the Company; then, and in each such case, the per share Exercise Price and the number of Warrant Securities in effect immediately prior to such action shall be adjusted so that the Warrant Holder of this Warrant thereafter upon the exercise hereof shall be entitled to receive the number and kind of shares of the Company which the Warrant Holder would have owned immediately following such action had the Warrant been exercised immediately prior thereto.  An adjustment made pursuant to this Section shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.  If, as a result of an adjustment made pursuant to this Section, the Warrant Holder shall become entitled to receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall reasonably determine the allocation of the adjusted Exercise Price between or among shares of such class of capital stock.

Immediately upon any adjustment of the Exercise Price pursuant to this Section, the Company shall send written notice thereof to the Warrant Holder (by first class mail, postage prepaid), which notice shall state the Exercise Price resulting from such adjustment, and any increase or decrease in the number of Warrant Securities to be acquired upon exercise of the Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

8.2Adjustment For Reorganization, Merger or Consolidation.  In case of any reorganization of the Company or consolidation of the Company with, or merger of the Company with, or merger of the Company into, another corporation (other than a consolidation or merger that does not result in any reclassification or change of the outstanding Common Stock), the corporation formed by such consolidation or merger shall execute and deliver to the Warrant Holder a supplemental Warrant Agreement providing that the Warrant Holder shall have the right thereafter (until the Expiration Date) to receive, upon exercise of such warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or merger, by a holder of the number of shares of Common Stock of the Company for which the Warrant might have been exercised immediately prior to such reorganization, consolidation, merger, conveyance, sale or transfer.  Such supplemental Warrant Agreement shall provide for adjustments which shall be identical to the adjustments provided in Section 8.1 and such registration rights and other rights as provided in this Agreement.  The Company shall not effect any such consolidation, merger, or similar transaction as contemplated by this paragraph, unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing, receiving, or leasing such assets or other appropriate corporation or entity shall assume, by written instrument executed and delivered to the Warrant Holder, the obligation to deliver to the Warrant Holder, such shares of stock, securities, or assets as, in accordance with the foregoing provisions, such Warrant Holder may be entitled to purchase, and to perform the other obligations of the Company under this Agreement.  The above provision of this Section shall similarly apply to successive consolidations or successively whenever any event listed above shall occur.

8.3Dividends and Other Distributions.  In the event that the Company shall at any time prior to the earlier of (i) exercise of all of the Warrant or (ii) the Expiration Date, distribute to its shareolders any assets, property, rights, evidences of indebtedness, securities (other than a distribution made as a cash dividend payable out of earnings or out of any earned surplus legally available for dividends under the laws of the jurisdictions of incorporation of the Company), whether issued by the Company or by another, the Warrant Holder shall thereafter be entitled, in addition to the Shares or other Warrant Securities and property receivable upon the exercise thereof, to receive, upon the exercise of the Warrant, the same property, assets, rights, evidences of indebtedness, securities or any other thing of value that the Warrant Holder would have been entitled to receive at the time of such distribution as if the Warrant had been exercised immediately prior to such distribution.  At the time of any such

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distribution, the Company shall make appropriate reserves to ensure the timely performance of the provisions of this Section or an adjustment to the Exercise Price, which shall be effective as of the day following the record date for such distribution.

8.4Adjustment in Number of Securities.  Upon each adjustment of the Exercise Price pursuant to the provisions of this Section 8, the number of securities issuable upon the exercise of the Warrant shall be adjusted to the nearest full amount by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of securities issuable upon exercise of the Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

8.5No Adjustment of Exercise Price in Certain Cases.  No adjustment of the Exercise Price shall be made if the amount of said adjustment shall be less than one cent ($.01) per Share, provided, however, that in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment so carried forward, shall amount to at least one cent ($.01) per Share.

8.6Accountant’s Certificate of Adjustment.  In each case of an adjustment or readjustment of the Exercise Price or the number of any securities issuable upon exercise of the Warrant, the Company, at its expense, shall cause independent certified public accountants of recognized standing selected by the Company (who may be the independent certified public accountants then auditing the books of the Company) to compute such adjustment or readjustment in accordance herewith and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to the Warrant Holder at the Warrant Holder’s address as shown on the Company’s books.  The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based including, but not limited to, a statement of (i) the Exercise Price at the time in effect, and (ii) the number of additional or fewer securities and the type and amount, if any, of other property which at the time would be receivable upon exercise of the Warrant.

9.Replacement of Warrant Certificates.  Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant Agreement, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrant Agreement, if mutilated, the Company will make and deliver a new Warrant Agreement of like tenor, in lieu thereof.

10.Elimination of Fractional Interest.  The Company shall not be required to issue certificates representing fractions of shares of Common Stock or other Warrant Securities upon the exercise of the Warrant, nor shall it be required to issue script or pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests may be eliminated, at the Company’s option, by rounding any fraction up to the nearest whole number of Share or other Warrant Securities, properties or rights, or in lieu thereof paying cash equal to such fractional interest multiplied by the current value of the Share or other Warrant Security.

11.Reservation, Validity and Listing.  The Company covenants and agrees that during the Exercise Period, the Company shall at all times reserve and keep available out of its authorized shares of Common Stock or other authorized Warrant Securities, solely for the purpose of issuance upon the exercise of the Warrant, such number of shares of Common Stock or other Warrant Securities, properties or rights as shall be issuable upon the exercise of the Warrant.  The Company covenants and agrees that, upon exercise of the Warrant, and payment of the Exercise Price therefor (if applicable), all shares of Common Stock and other Warrant Securities issuable upon such exercise shall be duly authorized, validly issued, fully paid, non-assessable and not subject to the preemptive rights.

12.Notices to Warrant Holder.  Nothing contained in this Agreement shall be construed as conferring upon the Warrant Holder the right to vote or to consent or to receive notice as a stockholder in respect of any meetings of shareholders for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company.  If, however, at any time prior to the expiration of the Warrant and its exercise, any of the following events shall occur:

(a)the Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or

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distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; or

(b)the Company shall offer to all the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor; or

(c)a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed;

then, in any one or more of said events, the Company shall give written notice of such event at least 15 days prior to the date fixed as a record date of the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale.  Such notices shall specify such record date or the date of closing the transfer books, as the case may be.

13.Notices.  All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly given when sent (i) by facsimile and (ii) delivered personally or by overnight courier or mailed by registered or certified mail, return receipt requested:

(a)If to the Warrant Holder or holders of the Warrant Securities, to its address as shown on the books of the Company; or

(b)If to the Company, to the address set forth below or to such other address as the Company may designate by notice to the Warrant Holder.

John Simonelli

Chief Executive Officer

GrayMark Productions, Inc.

101 North Robinson, Suite 920

Oklahoma City, Oklahoma 73102

15.Entire Agreement: Modification.  This Agreement contains the entire understanding between the parties with respect to the subject matter hereof, and the terms and provisions of this Agreement may not be modified, waived or amended except in a writing executed by the Company and the Warrant Holder.

16.Successors.  All the covenants and provisions of this Agreement shall be binding upon and inure to the benefit of the Company, Warrant Holder and the holders of the Warrant Securities and their respective successors and assigns.

17.Termination.  This Agreement shall terminate at the earlier of (i) the public sale of all of the Warrant Securities, or (ii) at the close of business on July 27, 2010.  Notwithstanding the foregoing, the indemnification provisions of Section 7 shall survive such termination.

18.Governing Law; Submission to Jurisdiction.  This Agreement shall be deemed to be a contract made under the laws of the State of Michigan and for all purposes shall be construed in accordance with the laws of said State without giving effect to the rules of said State governing the conflicts of laws.  The Company and the Warrant Holder hereby agree that any action, proceeding or claim arising out of, or relating in any way to, this Agreement shall be brought and enforced in a federal or state court of competent jurisdiction with venue only in (i) the Ingham County District Court in the State of Michigan, or (ii) the United States District Court for the Western District of Michigan, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.  The Company and the Warrant Holder hereby irrevocably waive any objection to such exclusive jurisdiction or inconvenient forum.  A party to this Agreement named as a defendant in any action brought in connection with this Agreement in any court outside of the above named designated county or district shall have the right to have the venue of said action changed to the above designated county or district or, if necessary, have the case dismissed, requiring the other party to refile such action in an appropriate court in the above designated county or federal district.

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19.Severability.  If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement.

20.Captions.  The caption headings of the Sections of this Agreement are for convenience of reference only and are not intended, nor should they be construed as, a part of this Agreement and shall be given no substantive effect.

21.Benefits of this Agreement.  Nothing in this Agreement shall be construed to give to any person or corporation other than the Company and the Warrant Holder and holders of the Warrant Securities any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Company and the Warrant Holder and any holder of the Warrant Securities.

22.Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

“Company”	GRAYMARK PRODUCTIONS, INC.
	By:
	John Simonelli, Chief Executive Officer
Attest:
Mark R. Kidd, Secretary
“Warrant Holder”
	Signature for an individual, including
	joint tenants and tenants in common:
(Signature)	(Signature)
Name (typed or printed)	Name (typed or printed)
Date: August 5, 2005.	Date: August 5, 2005.

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EXHIBIT ”A”

FORM OF SUBSCRIPTION (CASH EXERCISE)

(To be signed only upon exercise of Warrant)

TO:GrayMark Productions, Inc.

101 North Robinson, Suite 920

Oklahoma City, Oklahoma 73102

The undersigned, the Warrant Holder, hereby irrevocably elects to exercise the purchase right provided by the Warrant Agreement for, and to purchase thereunder,                          Shares of GrayMark Productions, Inc. (the “Company”), and herewith makes payment of $                               therefor, and requests that the certificates for such securities be issued in the name of, and delivered to,                                                                                                     , whose address is                                                                                                                                                                 , all in accordance with the Warrant Agreement.

Dated:
	(Signature must conform in all respects to name of Holder as specified on the face of the Warrant Agreement)
	(Address)
	(Social Security Number or
	Tax Identification Number)

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EXHIBIT ”B”

FORM OF SUBSCRIPTION (CASHLESS EXERCISE)

(Intentionally Blank)

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EXHIBIT ”C”

FORM OF ASSIGNMENT

(To be exercised by the Warrant Holder if the

Warrant Holder desires to transfer the Warrant Agreement.)

FOR VALUE RECEIVED                                                                                  hereby sells, assigns and transfers unto

                                                                                                                                                      &nbs p;                                   

(Print name and address of transferee)

the Warrant Agreement, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                                                                                                                      Attorney, to transfer the Warrant Agreement on the books of GrayMark Productions, Inc., with full power of substitution.

Dated:
	(Signature must conform in all respects to name of Holder as specified on the face of the Warrant Agreement)
	Address of Assignee:
	(Social Security Number or
	Tax Identification Number
	of Assignee)

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